Pushpay expands from faith to utilities and seeks ASX listing

Pushpay Holdings [NZX: PAY] is planning an ASX listing by the end of the year and is expanding its mobile payment app beyond the religious sector to helping people pay bills for utilities such as water and insurance.

At the company's annual meeting in Auckland today, chief executive Chris Heaslip said Pushpay still had plenty of opportunity for growth in the US 'faith' sector, where it has captured around 1.5 percent of the market to date.

When he and co-founder Eliot Crowther set up the company they wanted to make payments easier in the faith sector but didn't want to limit themselves to that industry, he said.

"We still care about that but we always thought the Pushpay payments solution was wider than one vertical and would work in other verticals," he said.

The company had looked at expanding into the non-profit sector but found attracting people to make donations is a different proposition to making it easier for them to make a bill payment.

Pushpay's pilot trials for its mobile bill payment solutions with Watercare and AMP so far this year have shown a 20 percent increase in bills being paid on time once consumers were sent text messages. The company's now looking to expand the numbers involved in those trials and to extend the pilots to the US over the next two years before scaling up to other enterprises.

"One of the things that's giving us credibility with large utilities is that we now have $1 billion of payment transactions through the platform. If it was just two guys in a garage with a platform they'd say 'are you joking?'," Heaslip said.

The short-term focus remains on the US faith sector where the company is now the leading payment solutions provider, with expansion into Canada last September. Heaslip said the company also has an opportunity to grow revenue by on-selling new features developed for the platform to early customers to boost annualised committed monthly revenue (ACMR).

Heaslip said the company remains on target to be monthly cashflow-positive sometime next year and to reach $100 million in ACMR by February 2018, six months earlier than originally forecast. It widened its annual loss to $19.4 million in May as it continues to scale the business for growth.

The company yesterday released its best ever quarterly operational results, increasing ACMR by 40 percent over the quarter to US$27.2 million. Merchant numbers rose nearly 20 percent to 4,491.

When one shareholder questioned the ASX listing, corporate development head Peter Huljich said the benefits included added credibility and the fact that some Australian and US fund managers are not mandated to invest in New Zealand.

"Australian and US fund managers are more actively investing and understand opportunities in the tech space and in finding a fair valuation for the company, it's important to attract a number of these investors," he said.

Pushpay has engaged an unnamed middle-market investment bank in San Francisco to raise at least US$30 million from US investors in a capital-raising it hopesto conclude by the end of this year to fund growth.

Shareholders today voted on more than doubling the total amount of remuneration available annually to pay non-executive directors, from NZ$300,000 to NZ$643,000 (US$450,000) and for any remuneration to be paid either in part or wholly to those directors by issuing shares, at the board's discretion.

Notes to the resolution said the increase would bring Pushpay's director remuneration more closely into line with current market rates, particularly the US. Group chair Bruce Gordon will get an increase of NZ$15,000 per annum to NZ$60,000 while non-executive directors' base fee would rise by a similar amount to NZ$45,000.

Pushpay's share rose 0.8 percent to $2.42 and are up 38 percent since the start of the year.

(BusinessDesk)